Zomato to lay off over 600 employees, others to take up to 50 per cent pay cut

HIGHLIGHTS

Zomato is letting go of over 600 employees as their roles are redundant now.

Zomato will assist sacked employees find new jobs while they get financial support from the company.

Zomato is also introducing up to 50 per cent pay cuts for the remaining workforce.

Zomato has announced it will be laying off around 13 per cent of its workforce to absorb the impact of the covid-19 pandemic. In a post, the company has announced it will initiate the process of identifying the redundant workforce, which is over 600 employees, but there will be compensations given to the impacted employees. As remote working goes mainstream, Zomato is foreseeing it as the next venture for its business, which includes hyperlocal deliveries of groceries, in an attempt to become “a transaction first company.” A number of measures have been announced by the food delivery platform, including temporary pay cuts of employees of up to 50 per cent and a major shift to remote working.

Zomato founder Deepinder Goyal has said the company will assist the 13 per cent laid-off workforce — which belongs to a little over 600 employees according to the news agency IANS — in finding new jobs while supporting them “financially” and “emotionally” for six months. The impacted employees will receive video calls from Zomato founder Deepinder Goyal, COO Gaurav Gupta, and CEO of food delivery business Mohit Gupta, to walk them through the next available steps for them. Zomato will offer severance of 50 per cent of their salaries for six months, in addition to health insurance and support to find other jobs immediately. Zomato has not specified if the sacked workforce belongs to the delivery business or other departments.

The latest round of layoffs comes as the second biggest firing of employees in the company, months after Zomato sacked around 540 employees in September last year, citing the proliferation of automation into the industry that left several roles redundant.

The remaining workforce at Zomato will be handed over pay cuts of up to 50 per cent, wherein the low-earning employees will get a minimum lowering of wages. Zomato has said some of its employees voluntarily took pay cuts earlier and those employees will “not be expected” to take the additional pay cuts. But these are temporary reductions in salaries of employees and should be done away within the next six months, per Goyal’s post.

Goyal has written a blog post outlining the big changes slated for the company. While the company immediately switched to delivering groceries after the coronavirus pandemic forced restaurants to either shut or operate cautiously, it is seeking to turn into a company that will ramp up the number of transactions happening on the platform. “There’s no going back to the ‘normal’ all we should focus on is building for the ‘new normal’. Considering what we know at this point, the idea is to make a complete shift towards being a transactions first company, focusing heavily on a small number of large market opportunities in the food value chain,” he wrote.

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